Dark clouds gathering over Nyrstar’s Belgian operation

Archiv – Worldwide operating recycling group Nyrstar has informed its Belgian works councils that it will temporarily suspend production and initiate a ’care and maintenance programme’ at its Balen zinc smelter in Belgium due to adverse economic circumstances.Belgium | Worldwide operating metals producing and recycling group Nyrstar has informed its Belgian works councils that it will temporarily suspend production and initiate a ’care and maintenance programme’ at its Balen zinc smelter in Belgium due to adverse economic circumstances.
The program will affect 586 workers on the site, and will take place before year end. According to the worlds largest zinc producer, it is necessary to address the significant and sudden decline in customer demand and reduce the accumulation of surplus zinc stocks in the market.
The suspension is anticipated to continue until mid 2009, but will be reviewed over the coming months. This equates to a reduction of approximately 25,000 tonnes of zinc in 2008 and a further 130,000 tonnes in the first half of 2009.
The suspension will minimise losses at the plant which have been caused by the prevailing low zinc price, combined with Balen’s high energy and production costs. According to Nyrstar, Balen – which takes about 20% scrap for its production- currently has the highest labour cost across the Nyrstar Group and its energy cost has increased by more than 50% in the last 12 months.
Paul Fowler, CEO of Nyrstar: ’The decision to put Balen on care and maintenance has not been taken lightly, and the Company regrets the impact on our employees, their families and the community. However, it is clearly unsustainable for Nyrstar and the industry to build stocks and produce metal at a loss. Taking decisive action now is the best way to provide our European plants with a sustainable future.’
The care and maintenance program at Balen will help to ensure the plant is maintained in a ready condition, enabling it to return to production when economic conditions improve. The adjoining site at Overpelt will continue to operate at a reduced five-day week, producing die-cast alloys and providing washed zinc oxides for the Group.
Nyrstar has previously announced that it is reducing production at its Budel plant in The Netherlands by 28% for the remainder of 2008, and this reduced level of production will now be maintained through mid 2009.
For Budel, this equates to a reduction of approximately 10,000 tonnes of zinc in 2008 and a further 35,000 tonnes in the first half of 2009. ’If the current market conditions continue, further actions across the Group may become necessary,’ warns Paul Fowler. Recently the group had to layoff 200 workers, of which 150 were positioned in Balen.